Cryptocharity —

Bitcoin makes bid for respect with new foundation

Bitcoin Foundation will support lead Bitcoin developer, organize conferences.

One of the traditional strengths of Bitcoin, the peer-to-peer cryptocurrency, has been its decentralization. Because no one is in charge of the network, users place their trust in the security of the Bitcoin protocol rather than in any specific institution.

Yet decentralization also has costs. So far, the management of the flagship Bitcoin client has largely been a volunteer effort. There's no one to field media inquiries or represent the Bitcoin community with policymakers. A group of Bitcoin luminaries hopes to change that by forming the Bitcoin Foundation.

The new organization is modeled on the Linux Foundation, a non-profit that employs Linux creator Linus Torvalds and represents the Linux platform to the broader world. A letter from Peter Vessenes, executive director of the freshly minted Bitcoin Foundation, notes that lead Bitcoin developer Gavin Andresen, "maintains the software and manages the core team without any compensation—or day job—beyond the joy of Bitcoin programming." Raising enough money to pay him a salary will be one of the foundation's first tasks.

The foundation is seeking support from both individuals and corporations. Donations are to be made in Bitcoins. The foundation's board represents several Bitcoin businesses, including the leading Bitcoin exchange Mt.Gox. Mt.Gox has pledged to be the foundation's first "platinum" corporate sponsor, paying dues of 10,000 BTC ($120,000) per year. Two other Bitcoin businesses, BitInstant and CoinLab, have pledged to become corporate members and have seats on the board.

In addition to supporting the development of the Bitcoin software, Vassenes says the foundation will organize a Bitcoin conference in Silicon Valley in 2013 and will "publish a set of best practices for businesses transacting in Bitcoin, covering topics from accounting to physical and digital security."

The Bitcoin Foundation won't have any direct control over the Bitcoin network, which will continue to operate independent of any institution. But the foundation hopes to accelerate the network's growth by supporting both better software and broader public awareness.

Timothy B. Lee
Timothy covers tech policy for Ars, with a particular focus on patent and copyright law, privacy, free speech, and open government. His writing has appeared in Slate, Reason, Wired, and the New York Times. Emailtimothy.lee@arstechnica.com//Twitter@binarybits

45 Reader Comments

There is nothing about bitcoin that is respectable nor trustworthy. That's the fundemental problem with non-State backed money. All the Cryptography in the world won't change that.

It also provides anonymity that state backed money can't provide which is another fundamental problem people are trying to solve. There is no reason in the world that they can't co-exsist and server different purposes imo.

You can't anonymously mail cash to someone?

No... you can't.... your address very much ties you to a physical location very trackable.... not sure what you point was?

You.... do know you can mail a letter without a return address, right? If your postage is right it will be delivered. Just dont screw up their address

These equations are quite complex and take tons of computing power to solve. That computing power costs in terms of heat and energy expended. By using modern GPU's as computing powerhouses, the cost bitcoin per kWh expended is near 1:1. This ratio can be increased with good server design and new forms of chips designed purely for bitcoin mining.

So many useful things that could be done with that processing power, all going to waste to power a giant scam. Sad.

In the old days, every dollar had an equivalent amount of gold represented in a safe somewhere, that way there was actually value to the currency. .

The existence of some amount of gold in a safe somewhere does not impart any value to a piece of paper for even a second. Only a government capable of certifying and enforcing the representation is what gives the currency that value. Even under the gold standard the value came from government backing, not from the gold. All currency is fiat currency. Including currencies based on a gold standard.

BTC is more stable than many state backed currencies, as has already been mentioned. Bitcoins are already wildly successful for what they are meant to be used for, and the more popular they become, the more possibilities there are for them.

There is nothing about bitcoin that is respectable nor trustworthy. That's the fundemental problem with non-State backed money. All the Cryptography in the world won't change that.

Last time I checked, the Internet is also non-state backed and it works just fine. Its mostly private companies that carry the data, and other non profit organizations, allot of organizations and individuals working together. The same is true for Linux which powers almost every server in the planet today.